King Digital's Profit Rises, But Stock Tanks On Weak Outlook

(RTTNews) - Gaming company King Digital Entertainment plc (KING), on Thursday reported an increase in profit for the first quarter, driven largely by lower expenses that offset drop in revenues. Both earnings and revenues for the quarter trumped Wall Street estimates.

However, shares of Candy Crush maker plunged over 10 percent in after-hours trade on some weak outlook.

Moving ahead, the company said it expects second-quarter gross bookings of $490 million to $520 million, compared to $611.1 million last year. Gross booking for the first quarter was $604 million, up 3 percent sequentially.

"Taking these factors into account as we look toward the remainder of the year, we expect the mid-year period to be seasonally softer, returning to growth trends in the latter part of the year," the company said in the statement.

King's first-quarter profit rose to $164 million or $0.51 per share from $127 million or $0.41 per share last year.

Excluding items, adjusted earnings for the quarter were $0.61 per share. On average, 12 analysts polled by Thomson Reuters estimated earnings of $0.53 per share for the quarter. Analysts' estimates typically exclude special items.

King said revenues for the quarter dropped to $569.5 million from $606.7 million a year ago. Analysts had a consensus revenue estimate of $563.4 million for the quarter.

Non-Candy Crush Saga titles generated $375 million, or 62 percent of total gross bookings in first quarter 2015, up from 55 percent of gross bookings in fourth quarter 2014.

CEO Riccardo Zacconi said, "Our first quarter 2015 results demonstrate the continued strength of our franchises, with Candy Crush Saga, Candy Crush Soda Saga and Farm Heroes Saga remaining top 10 grossing games in the Apple App Store and Google Play Store in the U.S."

Expenses for the quarter dropped to $364.5 million from $441 million a year ago.

KING closed Thursday's trading at $14.99, down $0.68 or 4.34%, on the Nasdaq. The stock further dropped $1.64 or 10.94% in the after-hours trade.